Investors must take Federal Reserve Governor Lael Brainard’s inflation policy is commenting heartily and selling some holdings, CNBC’s Jim Cramer said Tuesday.
“This is not a call to sell everything… In fact, health care stocks and oils are still very attractive here, and I’d bet more money if they go down. Oil because of supply issues, drugs because ‘I’m pretty immune to a Fed-mandated recession. I’m just saying I’m getting more conservative,” the “bad moneysaid the host.
“If you own something you don’t like, this is a good time to sell it. We’re way up there. I think you’ll get good prices in hindsight. When the Fed’s biggest pigeon turns into a bird of prey, you better lend him attention,” he added.
Cramer’s comments come after Brainard Tuesday pivoted from his usual stance in favor of low interest rates to calling for aggressive action against inflation. Brainard said in a speech written for a Minneapolis Fed discussion that political action could soon include a balance sheet adjustment and indicated that interest rate increases this year could be more than the 0.25 percentage point increase. implemented in March.
Investors fear an economic slowdown rocked the markets on Tuesday following Brainard’s comments. The Nasdaq Composite fell 2.26% and the Dow Jones Industrial Average fell 0.8%. The S&P 500 fell 1.26%.
All three market indices gained on Monday, with the tech-heavy Nasdaq in the lead. Cramer said the market moves this week are a sign that investors are confused.
“I don’t like it when you have a market where, on Monday, the dealers buy all the semis and get rid of the health care ones, and then on Tuesday” they do the opposite, Cramer said. “That’s a classic sign that no one knows what to do,” he added.
“I will not allow myself to be oblivious to this wake-up call… I am blowing my horns and selling fast,” he said.